46 ◾ Rudolph (Rudy) Santacroce
Equation 6.2: Basic Productivity Equation
*
AOMP /RIMP
AOBP /RIBP
(6.2)
where
AOMP = Aggregated outputs, measured period
RIMP = Resource inputs, measured period
AOBP = Aggregated outputs, base period
RIBP = Resource inputs, base period
Work Distribution/Allocation
Once it is determined that a stang and/or productivity study will be conducted, the rst step is
to develop an activity or task list for the sta being studied. Once this information is prepared, it is
consolidated as part of a work distribution chart. is chart represents all activities of the function
and all personnel responsible for performing the specied activities. Analysis of this chart enables
the HME to ask questions and solve problems relating to the following topics:
◾ What activities take the most time?
◾ Are skills used properly?
◾ Is there misdirected eort?
◾ Is anyone performing an unrelated task?
◾ Is the work distributed evenly?
*
Marvin Mundel, “Productivity Measurement and Improvement,” Handbook of Industrial Engineering, ed.
Gavriel Salvendy (New York: John Wiley & Sons, 1982), 1.5.1.
Table6.2 Cost Improvement Outcomes for Stafng and Productivity
Improved efciency by:
Productivity monitoring with performance
feedback
Time management techniques
Incentive programs
Short interval scheduling
Increased employee motivation, moral, and
training
Reduced workload due to:
Work simplication: eliminate, combine,
sequence, simplify
Process improvement
Improved standards
Improved workstation/workplace layout
Reduced labor costs by changing skill mix
Improved labor utilization by:
Reduced staff overtime
Reduced shift differential and on-call
Reduced xed activities: meetings,
conferences, etc.
Scheduled staff to accommodate workload
peaks and valleys
Used in-house consultants vs. outside
contracted services
Reduced unit cost: Increased ratio of output to
input
Used existing resources to perform more
procedures
Updated existing equipment/technology
Budget, Cost, and Performance Improvement Approaches ◾ 47
Analysis rst concentrates on the most time-consuming activities. Eliminating unnecessary
work is the next step, followed by determining the proper level of work. Workload is then real-
located if necessary and stang is adjusted to match demand. It should be noted that leveling
workload to meet demand is a key element in any work distribution eort.
Incentive Program Design
Incentive programs are used most eectively when employees are performing repetitive tasks with
little or no variation. Incentive programs can increase worker productivity while keeping stang
levels constant. It is important to decide on a standardized unit of measure (i.e., number of units
produced, number of physician dictations transcribed, etc.) before specifying the incentive param-
eters. One must also think very carefully about the metric on which the incentive is based so that
unintended consequences, such as high productivity levels of poor-quality work, do not result.
Work Redesign
Table6.3 outlines cost improvement outcomes for work redesign. Work redesign has a relatively
wide range of applications. On a micro level, one example could be the improvement of the pro-
cess by which an AP clerk processes a patient’s bill. On a larger scale, however, a related example
would be the complete reinvention by which an entire process takes place from the moment the
patient presents at the hospital to the moment the charges are coded and a bill is developed. Also
referred to as work simplication or method improvement, and Lean methods, work redesign can
be broken down into a set of steps or guidelines:
Table6.3 Cost Improvement Outcomes for Work Redesign
Improved efciency by:
Productivity monitoring with performance
feedback
Time management techniques
Increased employee motivation, moral, and
training
Reduced workload due to:
Work simplication: eliminate, combine,
sequence, simplify
Process improvement
Improved standards
Improved workstation/workplace layout
Reduced labor costs by changing skill mix
Evaluated materials and supplies for reduction
through:
Reduced rate of usage per procedure
Reduced purchase price using generics
Reducing costs by using reusable items vs.
disposable
Reduced inventory levels: opportunity costs
on capital
Reduce waste due to contamination
Reuse of supplies for same or other
purposes
Resale/recycle of used supplies
Reduced unit cost: Increased ratio of output to
input
Used existing resources to perform more
procedures
Updated existing equipment/technology
48 ◾ Rudolph (Rudy) Santacroce
◾ Determine the purpose of the work. If the reason for the method cannot be dened, then
the method is not needed, and therefore does not have to be designed.
◾ Conceptualize ideal processes. It is important to include the workers or the people aected
by the process to gain insight on the ideal state.
◾ Identify constraints and regularity. Consider the necessity of each constraint. Dene the
regularity, which is dened as the conditions of each element that represents a large propor-
tion of occurrences for which the method is designed.
◾ Outline practical process. Further develop ideas by applying the following principles to
each: its purpose, lowest-cost input, lowest-cost output, least complicated sequence, maxi-
mum utilization of human skills, and maximum utilization of equipment capacity.
◾ Select the best process. Evaluate the best process using the following criteria: lowest hazard,
economic feasibility, ability to control, psychological factors, and organizational impact.
◾ Formulate details of the newly selected process. is phase is the physical manifestation
of the new method. It may include owcharts, specications, techniques, principles, check-
lists, and so on.
Process Flow Mapping/Lean Methods
Table6.4 outlines cost improvement outcomes for process ow mapping and lean methods. In
many cases, a quantitative process system ow chart helps HMEs and their customers determine
problems, bottlenecks, and ineciencies. On a basic level, a ow diagram outlines the current
process and steps involved in completing that process. Typically, a proposed ow is then devel-
oped that addresses the problems with the current ow. When testing is needed, a computer-based
simulation can yield very detailed and extensive feedback.
Flow Diagram
A ow diagram represents the location of activities and sta and the ow of materials between
activities. Symbols in the owchart identify certain steps in the process such as input/output, deci-
sion, terminate/interrupt, and so on.
Table6.4 Cost Improvement Outcomes for Process Flow Mapping/Lean Methods
Improved efciency by:
Time management techniques
Reduced workload due to:
Work simplication: eliminate, combine,
sequence, simplify
Process improvement
Improved workstation/workplace layout
Improved labor utilization by:
• Reduced staff overtime
• Reduced shift differential and on-call
• Scheduled staff to accommodate
workload peaks/valleys
Used in-house consultants vs. outside
contracted services
Reduced unit cost: Increased ratio of output to
input
Used existing resources to perform more
procedures
Updated existing equipment/technology
Budget, Cost, and Performance Improvement Approaches ◾ 49
Queuing and Simulation
Computerized simulation takes the ow diagram to a new level by modeling the process being
studied. Engineers and customers alike can immediately gain insight into the process by seeing
the interaction of all the dierent elements in the system, in real time. Bottlenecks can be imme-
diately spotted and changes to the system can be instantaneously evaluated. Many simulation
packages currently on the market provide a wide range of usefulness to the ME. As of this print-
ing, two commonly used object-oriented simulation packages include ARENA®, and ProModel®/
MedModel®. Both provide a detailed analysis of the simulated system, as well as lists of statistics
on arrival times, process lengths, departure times, wait times, and so on. e major dierence
between these packages is the ease of programmability and the detail of display graphics. A key
benet is that once the model is developed and validated, engineers and customers can conduct
what-if analysis to see how the system changes as resources change.
Scheduling
Table6.5 outlines cost improvement outcomes for scheduling. MEs typically assist in the devel-
opment of schedules for department sta, patient arrivals, key equipment, and other resources.
Unfortunately, there is no generalized scheduling methodology as healthcare remains highly sto-
chastic. ere are, however, some basic guidelines to follow:
◾ Shortest processing time rule. All jobs/processes with the shortest duration typically
should be done rst. By following this guideline, expected results should include:
− A minimized average procedure ow time
− A minimized average procedure wait time
− A minimized average procedure downtime or turnover (the dierence between comple-
tion time and the start of the next procedure)
is method works best in environments with a high standard deviation of procedure times.
◾ Due date rule. Sequence the procedures according to the earliest required completion time.
While this rule will not minimize the average wait time, it will minimize the maximum
wait time.
Table6.5 Cost Improvement Outcomes for Scheduling
Improved efciency by:
Time management techniques
Short interval scheduling
Improved labor utilization by:
• Reduced staff overtime
• Reduced shift differential and on-call
• Reduced xed activities: meetings,
conferences, etc.
• Scheduled staff to accommodate
workload peaks/valleys
Reduced contract/consultant costs by:
Bidding
Bonus/penalty clauses
Reduced unit cost: Increased ratio of output to
input
Used existing resources to perform more
procedures
Updated existing equipment/technology
50 ◾ Rudolph (Rudy) Santacroce
◾ Slack rule. Sequence procedures based on the shortest downtime (turnover time) before the
start of the next procedure. is rule will minimize procedure downtime. is rule is most
useful when scheduling multiple machines in order to have a high utilization percentage.
Quality Control
Table6.6 outlines cost improvement outcomes for quality control. Determination of quality speci-
cations is the basis of quality assurance in a production environment. MEs will nd quality
control techniques very useful for internal benchmarking, setting acceptable limits and standards,
or giving department managers feedback on a wide variety of department benchmarks. Two of the
most commonly used quality control tools are discussed below.
Control Charts
*
Control charts give a graphic representation of the status of a process with a clear denition of the
acceptable high and low limits of that process. e process may be anything, such as operating
room turnover time or pharmacy order preparation time. e process for setting up a control chart
is as follows:
◾ Twenty or more samples are selected (identied) and sequentially numbered.
◾ e range of the values obtained for each sample is determined (the largest minus the smallest).
◾ e average range (Ravg) is then calculated using Equations (6.3a) and (6.3b).
◾ e upper control limit (UCL) and lower control limit (LCL) dene the acceptable range of
the process and are calculated using the following formula:
=
Σ
R
R
n
avg
(6.3a)
*
Christian Gudnason, “e Quality Assurance System,” Handbook of Industrial Engineering, ed. Gavriel Salvendy
(New York: John Wiley & Sons, 1982), 8.2.9–8.2.10.
Table6.6 Cost Improvement Outcomes for Quality Control
Improved efciency by:
Productivity monitoring with performance
feedback
Time management techniques
Incentive programs
Increased employee motivation, moral, and
training
Reduced workload due to:
Process improvement
Improved standards
Reduced labor costs by changing skill mix
Evaluated materials and supplies for reduction
through:
Reduced rate of usage per procedure
Reduced purchase price using generics
Reduced inventory levels: opportunity costs
on capital
Reduce obsolescence, breakage and
pilferage of items
Reduced unit cost: Increased ratio of output to
input
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